Sour ‘Sugar’ ...

The latest disquieting disclosures from the internal files of the Lockheed Aircraft Corporation strike at the heart of the international arms trade, that dubious traffic in which the United States has the questionable distinction of being number one. American national interests have been ill‐served by the operating practices of a company which exists today only by grace of a Federal bailout.

Italy, Turkey, Japan and the Netherlands are among this country's allies shaken by political storms in the wake of Lockheed's payment of outright bribes to secure sales of its aircraft, as attested in documents obtained by the Senate Subcommittee on Multinational Corporations. Especially disgraceful was the clear evidence that corrupt military officers in Colombia deliberately falsified their Government's national defense estimates to favor an otherwise unjustified purchase of Lockheed equipment—a deception perpetrated with full knowledge of company executives. For this chicanery, the high‐ranking clients were amply rewarded with, in Lockheed's succinct jargon, “sugar.”

Lockheed has admitted paying at least $22 million in what it calls kickbacks; the General Accounting Office puts the figure $2.4 million higher. Either sum amounts to more than 10 percent of the total of outstanding loans Which Lockheed obtained in 1971 on the strength of an extraordinary Federal guarantee approved by Congress to avert bankruptcy of the major aerospace contractor. On that score, the G.A.O. warns that Lockheed, even on its own optimistic projections, may not be able to repay these loans by the due date of 1978.

The United States Government and its taxpayers have been had—financially and diplomatically. In Japan, Lockheed money went to the aid of right‐wing militarists whose political stance is contrary to the entire democratic evolution which the United States has fostered for three decades. The new Government being formed in Italy will find it harder to survive as a result of popular disgust over Lockheed's largesse there; even the affection felt for the Dutch monarchy is dampened by allegations that Prince Bernhard was one of Lockheed's favored friends. Elsewhere, as disclosures of routine bribery by Lockheed and other American aircraft manufacturers become known, United States prestige suffers —even though Washington may not have been aware of or involved in the corruption.

Legal action against these reported instances of bribery are the responsibility, in the first instance, of the countries where the offenses occurred. Any official requests from foreign authorities for documents and witnesses to assist in their investigations must be sympathetically considered in Washington, if this country is to rescue its reputation for international integrity.

The United States cannot escape its share of responsibility for fostering an international arms trade in which venal practices seem to have become standard operating procedure. Since the end of World War II this country has shipped an estimated $100 billion worth of weapons to 136 countries, a sales record equal to that of the combined national arms industries of all the rest of the world. More than a thousand American companies, including major industrial concerns well known for their everyday consumer lines, are engaged in the production and legal export of weaponry.

In recent years, American arms exports have been guided less by this country's global security requirements and more by the lure of lucrative export opportunities. The Federal Government has provided generous credit terms for arms transactions. About two thousand American military personnel are attached to Military Assistance Advisory Groups in some forty countries; former members of these teams have stated that they did their best to sell foreign governments on the merits of American‐made weaponry.

The short‐term health of a politically powerful segment of American industry has weighed more heavily in Washington's calculations than the destabilizing effects of huge arsenals in far‐flung areas of the world. There have even been cases in which the Army was found to have advanced Pentagon funds to arms manufacturers to tide them over until payment arrived from their foreign customers—a clear violation of the Foreign Military Sales Act.

Even before the Lockheed disclosures, the Senate Foreign Relations Committee had approved a measure to impose policy disciplines on the burgeoning arms trade. Senator Humphrey, chief author of the bill, called it “an attempt to shift from an emphasis on selling arms to one of controlling arms transfers.” This legislation deserves high priority now.

On the news of Lockheed's illegal payments, and those of numerous companies in aerospace, petroleum and other industries, President Ford has ordered an investigation to determine what if any sanctions are in order. Treasury Secretary Simon promises “to see to it that all those who have made improper payments and bribes do not profit through reducing their Federal tax liabilities.”

That is the least that the American taxpayer can expect from the Government; for the world trading community in general, perhaps the message is seeping through that bad business practices are bad business.

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